The company announced its 23rd annual report, with annual revenue of 1.06 billion yuan +4.64%, net profit of 180 million yuan +19.55%, net profit after deducting non-return mother of 133 million +4.50% yoy, gross profit margin 29.05% yoy -0.71 pct, and net profit margin of 14.92% yoy +1.86pcts yoy. Our review is as follows:
23 Overall performance was in line with expectations. The increase in the Q4 business was mainly due to the continued release of automotive electronics and MR products. The company's Q4 revenue in a single quarter was 392 million yuan +26.66%, net profit to mother of 52 million +8.03% month-on-month -6.57%, net profit of 47 million yuan +7.07% month-on-month +25.86% month-on-month, gross profit margin 29.55% y-2.48pcts -2.48pcts month-on-month -0.49pcts, net profit margin 13.20% yoy +0.30pcts month-on-month. The Q4 revenue growth rate was low, mainly affected by weak recovery in downstream consumer demand, while the automotive electronics business maintained a relatively rapid growth rate. In terms of period expenses, the Q4 management and marketing research and finance rates were 5.13%/3.05%/9.22%/-2.29% year-on-year, -0.09/-0.18/-0.16/ -0.61 pct, respectively, and the overall cost rate was -1.03 pcts year over year.
By business segment, the smart consumption sector achieved revenue of 282 million yuan +1.68%, accounting for 23.35% of revenue; communications business revenue of 123 million yuan -26.84%, accounting for 10.18%; automotive electronics revenue of 633 million yuan +33.43%; medical and personal care revenue of 49 million yuan -40.34% YoY, accounting for 4.03%; and other leaders achieved revenue of 120 million yuan YoY -20.98%, accounting for 9.95%. By product structure, micro transmission system revenue was 753 million yuan +6.42% YoY, accounting for 62.47%, gross profit margin 25.76% YoY -0.26pct; precision parts revenue of 375 million -2.18% YoY, accounting for 31.13%, gross profit margin 37.65% YoY -0.78pct; and precision mold and other revenue of 77 million +26.95% YoY.
In terms of technology research and development, the company is gradually expanding into the field of upstream micromotors. The company has completed the development of high-torque DC motors, brushless DC motors, miniature brushless hollow cup motors, and permanent magnet stepper motors. Among them, high-torque DC motors and brushless hollow cup motors have all formed a series of products, successfully used in the fields of automobiles, medicine, humanoid robots, etc., and is carrying out research on 4mm diameter brushless hollow cup motors to break through foreign technical barriers; 8mm permanent magnet stepper motors have achieved automated mass production, and is also actively laying out 3.4mm and 4.4mm more challenging products.
Looking ahead to 24 years, the XR and automotive electronics businesses are expected to usher in volumetric growth. The company's card position A customers highlight technical barriers. MR products are expected to further establish industry benchmarks and attract more potential customers; the automotive electronics business continues to mass-produce and launch many categories such as spoilers, rotating screens, doorknobs, electric pushers, etc., and is expected to maintain a medium- to high-speed growth trend in the future; in terms of smart homes and medical care, it is expected that the introduction and release of new products will continue to grow. We are optimistic about the trend of broadening the application boundaries and intelligence of the company's microtransmission systems in XR, automobiles, medical care, humanoid robots, etc. After the company integrates gearboxes and drives, the product value is expected to continue to increase, and there is plenty of room for growth.
Maintain a “Highly Recommended” investment rating. Our latest forecast is 24-26 revenue of 15.1/19.6/2.65 billion yuan, and net profit of 2.3/29/3.9 billion yuan, corresponding EPS of 1.33/1.69/2.28 yuan, corresponding to the current stock price PE of 46.3/36.6/27.0. Considering the company's technical barriers in the field of micro transmission systems and the early card position advantages of leading customers, while actively promoting vertical integration strategies, we maintain a “highly recommended” investment rating for the company.
Risk warning: downstream demand falls short of expectations; progress of new product R&D projects falls short of expectations; risk of fluctuations in raw material prices; risk of fluctuations in the macropolitical and economic environment.